Batteries keep our increasingly “electronic” lives running. This ensures an apparently unceasing demand for them. In other words: the future is looking bright for the battery market – also in Europe.
From the 1990s onwards, the electronic “magic boxes” – laptops – began to shrink to briefcase format. And tables in cafés and restaurants were increasingly crowded with portable electronic devices, such as cell phones and cameras. However, the one thing that was still missing to make mobile users happy was a lightweight, rechargeable power source. But we didn’t have to wait long for that. In 1991, the first commercially available lithium-ion battery in an Hi8 video camera from Sony became available in stores. Following this, the technology grew to become the preferred energy source for every conceivable purpose – from small devices to large energy storage solutions. And there is no foreseeable end to this trend.
For example, according to an analysis by Bloomberg New Energy Finance (BNEF), by 2040, the power of lithium-ion batteries will increase to 942 gigawatts and require investments of around USD 1.2 trillion. The analysts identified large price drops for batteries as one of the main drivers of this boom. This will also bring about high growth rates in the global market for energy storage systems in the future.
But past performance is also impressive. For instance, the German Electrical and Electronic Manufacturers’ Association, ZVEI, has calculated that between 2016 and 2018 the German battery market rose by almost EUR 420 million (+ 15 percent) to EUR 3.3 billion. In fact, it has increased an amazing 69 percent since 2013. At EUR 1.19 billion, lithium-ion technology is just ahead of lead batteries (EUR 1.08 billion) and other technologies (EUR 1 billion), such as zinc-air, lithium coin cells, and nickel-cadmium.
Energy storage to save the climate
The climate targets formulated by politicians demand fundamental electrification of vehicles and storage of renewable energies, which fuels demand. For example, pure electric vehicles generally need a lithium-ion battery and a lead battery.
Since 2013, the market volume of lithium-ion batteries has increased more than 6-fold, which can be attributed mainly to the enormous rise in imports to Germany because cells from Asia are turned into finished batteries in Germany.
According to the ZVEI, between 2016 and 2018, German battery production increased by more than EUR 250 million to almost EUR 2.4 billion – a rise of more than twelve percent. Last year, batteries to the value of EUR 3.3 billion were exported. In the period from 2016 to 2018, lithium-ion batteries made up two thirds of the growth in exports of all battery systems. However, in 2018, lead batteries were also high performers in terms of export, with a volume of almost EUR 1.5 billion.
China is shrinking
For the global battery market across all technologies, analysts from Inkwood Research predict a compound annual growth rate (CAGR) of 6.63 percent from 2019 onwards, which would result in a volume of USD 135.43 billion by 2027. Their forecasts are based on the booming automotive industry, increases in electric mobility, growing demand for energy storage systems, new applications in industrial drive technologies, and, last but not least, increasing use of rechargeable batteries in consumer electronics.
With just over 60 percent last year, the analysts see the biggest market share and the highest growth rate in the Asia-Pacific region. Here, too, lead batteries were still ahead in 2018 with a share of 52.40 percent. However, this dominance, which has existed for about one hundred years, is nearing an end.
The Chinese share in the world market will also shrink, says the London-based market research company. In 2017, at 134.8 GWh, China still had 60 percent of global lithium-ion production capacity, but the analysts expect this to decline to just 53.8 percent by 2028. This is because the rapid market growth also opens up lucrative opportunities for other locations. Currently, 68 mega factories for the production of lithium-ion batteries are planned worldwide, which could increase capacity to 1.45 TWh by 2028. Europe and North America will be the main beneficiaries of this. The market researchers forecast that Europe’s share of global production capacity will increase from the current 5.3 percent to almost 20 percent by 2028 and the North American share from 5.7 percent to 14.8 percent.